Canada finance minister says will adopt blind trust, divest assets

OTTAWA (Reuters) - Canada’s Finance Minister Bill Morneau said on Thursday he will place his assets in a blind trust and divest all his stock in a publicly traded family business, amid opposition allegations that these holdings put him in a conflict of interest.

Canada's Finance Minister Bill Morneau speaks during Question Period in the House of Commons on Parliament Hill in Ottawa, Ontario, Canada October 19, 2017. REUTERS/Chris Wattie

Questions about the assets of Morneau, the multimillionaire former chief executive officer of human resources management firm Morneau Shepell, have dogged the minister and led some to question whether he would be forced to resign.

His plan to adopt a blind trust follow weeks of backlash over a government attempt to reform small business taxes, which have become a major stumbling block for Prime Minister Justin Trudeau’s two-year-old Liberal government.

Morneau said he had initially intended to put his assets in a blind trust - as Trudeau has - but had changed his mind after consultations with the ethics watchdog. He said he had “naively” believed that following the advice of the ethics commissioner was a high enough standard.

“What we’ve seen over the last week is that I need to do more. As minister of finance, in this role, it’s important to make sure people have absolute confidence,” he told a news conference, adding he has “about a million shares” in the company and would work with a trustee to divest his and his family’s holdings.

Shares of Morneau Shepell Inc fell nearly 2 percent on Thursday to C$20.63, shedding about C$21.6 million in market value.

Morneau was elected in 2015 when the left-leaning Liberals were vaulted to a surprise majority under Trudeau, becoming one of the many rookie ministers in Trudeau’s cabinet.

In a heated session of parliament after the news conference, opposition politicians said Morneau’s 2016 legislation on pension reform increased the profits of Morneau Shepell.

“The finance minister and his company, Morneau Shepell, have benefited from the minister’s actions,” said Conservative member of parliament Maxime Bernier.

Morneau said he had been pulled out of government meetings at least twice since becoming finance minister to guard against conflicts of interest between policy decisions and his company.

“I don’t know the total number of times, but I can remember at least two times being taken out of meetings because of that conflict-of-interest screen, I believe. Of course I don’t know what happened in those meetings,” he said.

Separately, Morneau said the government’s autumn fiscal update will be released on Oct. 24.

Reporting by Andrea Hopkins and Leah Schnurr; Editing by G Crosse and James Dalgleish